The term “investor friendly” title company is thrown around a lot in the real estate world. Unfortunately, some automatically attach a negative connotation to the term not understanding it’s actually a very specialized knowledge and skill set assigned to title companies, agents, attorneys, lenders and accountants. Of these, the vendor that can really make or break your deal is the title company.
So what does it mean for a title company to be “investor friendly”?
The short answer is that an investor friendly title company won’t blow up your deal AND knows how to hold it together. An investor friendly title company thinks outside of the box, speaks the lingo and knows when not to speak (if you know what I mean, you know what I mean). Also, an investor friendly title company understands and appreciates the importance of speed and money to an investor. Investors don’t care whether the window treatments are staying; they care about the money they’re making on the deal – period.
How do you know if a title company is investor friendly?
There are a few questions you can ask a title company to determine if they are truly investor friendly:
- What is the difference between a double closing and a simultaneous closing?
Many either a) won’t know or b) will say they are just different terms used to describe the same thing- Red Flag!
A Double Closing is when both sides of the deal fund independently of one another, but within seconds of each other.
A Simultaneous Closing is when you’re using the end buyer’s money to fund the first side. Totally different.
- Do you work with land trusts?
If they don’t work with land trusts – Red Flag!
If they do, ask if they require that you provide a copy of the trust. If they say yes – Red Flag! As long as the deed into the land trust was drafted correctly you should never be required to provide anyone a copy of your land trust.
- How do they close Subject To’s?
A subject to isn’t much different from a regular closing. The title company just moves the existing mortgage from requirements clear over to exceptions from coverage. They’ll probably have your buyer sign a disclosure or acknowledge the exception, but an investor friendly title company will know how to do this without sending anyone running away from the closing table.
- Has the agent or the owner ever personally done a flip, a wholesale deal or managed a rental?
Real world experience in the investment space goes a loooong way. It’s nice to work without someone that has enough real-world experience to help you brainstorm on how to structure (or save) a deal. Hopefully, you won’t need this help often, but when you do it will be priceless.
These questions should help you determine if a title company touting themselves to be “investor friendly” can really passes the sniff test. It’s important to build your team of trusted vendors that will ensure your deals get closed, and a title company is an integral member of that team. RTR Title would love the opportunity to become a member of your investment team! Call or email us today.